The relief which plaintiffs seek is simple. Because HBKW allegedly caused LEEA's insolvency, leaving beneficiaries' medical bills unpaid, plaintiffs seek compensation in the amount of the unpaid benefits, plus attorneys' fees and costs. It is this claim of relief which presents the salient issue here.

1. HBKW's MOTION FOR SUMMARY JUDGMENT

Defendant HBKW and the individual defendants have moved for summary judgment on the premise that ERISA does not permit a suit by the beneficiaries of a plan against plan administrators for compensatory damages. Rather defendants argue, beneficiaries may only recover for the benefit of the plan which in the present case is defunct.

The Act in Section 502, 29 U.S.C. § 1132, describes the forms of civil action permitted to enforce the Act, including two relevant in this case:

(a) Persons empowered to bring a civil action.

A civil action may be brought -

1.) by a participant or beneficiary -

A.) . . .

B.) To recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.

2.) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title.

We first examine the § 502(a)(1) cause of action. Following McMahon v. McDowell, 794 F.2d 100, (3d Cir. 1986), we conclude that the claims asserted here cannot be classified as § 502(a)(1) claims. Such claims are "personal in nature", seeking to define a particular individual's rights under the plan. Id., at 109; Livolsi v. R.A.M. Construction Company, 728 F.2d 600 (3d Cir. 1984). In this suit there does not appear to be any dispute about any individual's entitlement to payment by LEEA. The definition of the plaintiff-class would eliminate persons not entitled to benefits. The present case transcends the individual claims and concerns broader questions of the fundamental administration of the plans.

The second claim under Section 502(a)(2), is specifically conditioned by Section 409, 29 U.S.C. § 1109:

Liability for breach of fiduciary duty

(a) any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. A fiduciary may also be removed for a violation of section 1111 of this title.

Defendants contend that this provision provides only for recovery by or for the plan and forecloses plaintiffs' claims of compensation for their own individual losses.

Defendants rely heavily on Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 87 L. Ed. 2d 96, 105 S. Ct. 3085 (1985). Defendants argue that the Court there held that a plaintiff could not recover personal damages from a fiduciary of the plan. A review of the case reveals considerably less support than defendants claim.

To deny plaintiffs relief on this basis would reward defendants for the thoroughness of their alleged mismanagement. If defendants wound the victim they may be sued, but kill it and the claim dies with it. Such a construction is absurd and unsupportable.

In the absence of a functioning plan, it is the class of beneficiaries and their rights under this plan which represent the interests of the plan for the purposes of Section 409. The plan's foremost interest as a non-profit trust is to satisfy the obligation to its beneficiaries. Because the present case presents not merely the claim of an individual to the exclusion of others, but the collective claims of the trust's beneficiaries, the relief sought would inure to the benefit of the plan as a whole, even though no plan technically exists.

Support is found in McMahon v. McDowell, 794 F.2d 100 (3d Cir. 1986). There employee pension plans were terminated and plaintiff workers sued the administrators alleging breach of fiduciary duties. Plaintiffs sought to recover unpaid pension plan contributions from the administrators. While holding that plaintiffs could not recover directly for benefits due them, the Court acknowledged that plaintiffs could recover damages for the plan which, though terminated, was being administered by the Pension Benefit Guaranty Corporation as successor trustee. In the present case plaintiffs do not appear to enjoy the fortuity of a successor trustee, but where the claims of the beneficiary and member classes are so consistent with the interests of the "plan", the purpose and intent of Section 409 and the statute as a whole are satisfied.

We conclude therefore that plaintiffs are able to maintain a claim for damages under Section 502(a)(2) and Section 409 of ERISA for the breach of the administrators' fiduciary duties. The motions of HBKW and individual defendants for summary judgment on this ground will therefore be denied.

2. HAMOT MEDICAL CENTER'S MOTION FOR SUMMARY JUDGMENT

Hamot Medical Center provided medical care to numerous persons covered by the LEEA plans. When LEEA went under, Hamot looked to the individual patients and their spouses (or in the case of a minor patient, the parents) for payment.
*fn5"
Ultimately Hamot filed several suits in the Court of Common Pleas of Erie County against these persons.

There is no question that the failure of LEEA cost individuals one of the most important benefits of their jobs -- the security of health insurance for them and their families. There is also no question that the unexpected obligation to pay such bills will present a serious hardship to these families, the cost of most medical care being out of reach of most average households.
*fn7"
While we are not ignorant of the impact on these families, the question presented by Hamot's suits is whether these patients are legally responsible for the cost of the medical services rendered to them. We must conclude that the defenses raised by the patient-defendants are not supported in law or fact and therefore summary judgment will be entered in favor of Hamot against the patient-defendants.

Patient-defendants assert two defenses to liability on Hamot's claims: a) accord and satisfaction, b) estoppel.
*fn8"
Defendants' reliance on accord and satisfaction is clearly unavailing here. The doctrine requires that payment be offered and accepted as settlement in full of a disputed debt. The mere presentation of an insurance card cannot be construed as a payment and patient-defendants cite no authority in support of their premise that it is. Further, no dispute over the amount of the bill arose until Hamot filed suit, a considerable time after the alleged payment.

Defendants' estoppel theory is that upon acceptance of the health insurance card from the patient, Hamot impliedly promised to look only to the insurer and to excuse the patient and his family from any obligation. Defendants fail to present any support for this theory, either in evidentiary material or in pertinent legal authority. Moreover, the documents signed by patients upon admission discount this defense. Two of these four patients expressly agreed to the obligation for their medical bills,
*fn9"
and all patients signed a consent form indicating at least some financial obligation.
*fn10"
But most importantly the mere fact that Hamot undertook to bill the patient's insurance carrier does not extinguish the patient's underlying obligation for the cost of that care, whether that obligation be characterized as contractual or quantum meruit. Defendants have produced no evidence to support their defenses of estoppel or accord and satisfaction, the mere belief or assumption that Hamot would look to LEEA alone being insufficient.

We deal here with only four individual cases filed by Hamot.
*fn11"
However, these have been followed by 59 similar cases.
*fn12"
In each the hospital sues for payment of medical bills which LEEA could not pay. Each defendant has filed an identical Answer raising the same defenses disposed of here. Each defendant has filed the same Third-Party Complaint joining HBKW on the same claims. As noted above the four cases before us today are representative of this burgeoning list of related cases. Our review of those cases indicates that we have resolved in the present four cases all issues raised in the subsequent cases.

Whether it be termed collateral estoppel or stare decisis it is our intention to resolve these remaining cases in a manner consistent with the rulings made in this Opinion. We will therefore require the plaintiff-hospitals to file an omnibus motion for summary judgment on all pending cases against individual patient-defendants. Plaintiffs shall examine each case to determine which if any present a unique issue not previously addressed in this case. Defendants shall then file an omnibus response, without re-arguing the rulings of law made herein, but identifying any cases with unique circumstances or issues.

By this means we hope to resolve all outstanding individual cases in an expeditious fashion, and thus permit court and counsel to focus on the class action cases.

3. OTHER MATTERS

Also pending at this time is HBKW's motion to strike plaintiffs' jury trial demand. We will take this matter under advisement until the Pretrial Conference.

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